Question on paying down loans

[trophy_taker]

I have a student loan that I want to pay off over next five years. It is set up on monthly payments currently. I currently pay $100 extra every monthly top of my payment. I want to add another $150 on top of that. Ok, here's the question:

When is the best time during the monthly period to be paying these extra payments? Isn't there a certain time in relation to your normal payment that would benefit you the most as far as accrued interest goes and getting the most "bang for your buck" as far as paying more towards principal?

My payment is $545 and I pay $645 on the 13th of the month. When do I make the extra $150 payment and should I put the extra $100 I've been paying with it or leave it on top of the 545?

I also pay between 5 and 10k at end of year as well.
Any opinions?

[tbeak]

My wife ended wchool with well over 180K in loans. we are doing the dave ramsey approach and doubling our payments (understand if this is not doable). we already have 3 of the 12 loans paid off and are putting nearly 700 on the lowest one now. My advice put all you can a month to it.

[trophy_taker]

I am more than doubling now, but just wondered I there was any benefit in splitting the payment up each month. I am doing Dave Ramsey plan as well. Thx and good luck getting debt free!

[scott123456789]

I have a student loan that I want to pay off over next five years. It is set up on monthly payments currently. I currently pay $100 extra every monthly top of my payment. I want to add another $150 on top of that. Ok, here's the question:

When is the best time during the monthly period to be paying these extra payments? Isn't there a certain time in relation to your normal payment that would benefit you the most as far as accrued interest goes and getting the most "bang for your buck" as far as paying more towards principal?

My payment is $545 and I pay $645 on the 13th of the month. When do I make the extra $150 payment and should I put the extra $100 I've been paying with it or leave it on top of the 545?

I also pay between 5 and 10k at end of year as well.
Any opinions?

Not sure what the terms of the loan as far as when it is compounded, but as it is a function of time, the sooner you can put the money in, the less principal left to compound. So if your scheduled to make payments on the 13th, should add the extra cash then.

[tbeak]

Oh sorry. mis-read i guess. we only pay once a month. but i am no finacial expert.

[CletusBodeen]

It woud be best to pay it all when it's due. You don't need to split it up.

[Roy D Mercer]

First of all keep GOOD records on all payments. I would pay all extra pays at the same time. If you loan is simple interest it will be easy to keep up with your balance, payments, etc.

[BrianL]

Pay it all at the same time. That way if a payment is not applied it will be easy to research, as well as you will know when it happens.

[flywise]

My wife was told by the holder of her student loan that she could not make principle only payments.( where any extra payments should be made). and that there was an early payoff penalty.
Good ( extra payment calculator ) I am toying with this on a few little loans I have

[flywise]

I am more than doubling now, but just wondered I there was any benefit in splitting the payment up each month. I am doing Dave Ramsey plan as well. Thx and good luck getting debt free!

If you are going to make extra payments pay it on the principle

[SAC]

If you are going to make extra payments pay it on the principle

This. Send it on two separate checks. One for the monthly payment, and one for principle. Make sure it is going to principle. if not your gonna just end the note early, and not save any on interest.

[BrianL]

If you pay it all at the same time, interest due will be paid and all remaining money will go to principle. If you try and split payment then apply to principle, while there is interest owing, your're asking for things to be applied incorrectly.

[SAC]

Regardless f how you do it, MAKE SURE the extra is gong to principle.

[flywise]

If you pay it all at the same time, interest due will be paid and all remaining money will go to principle. If you try and split payment then apply to principle, while there is interest owing, your're asking for things to be applied incorrectly.

Not exactly,
Google paying off loans early. I cant remember the terminology exactly but the best way to pay off a loan early is to make extra payments to the principle

[M-2]

[/b]

Not exactly,
Google paying off loans early. I cant remember the terminology exactly but the best way to pay off a loan early is to make extra payments to the principle

I agree with flywise.
When we were paying down our mortgage 20+ years ago, we specified the extra payment be applied to principle. Some loans don't allow that, but our mortgage loan did.